NEGOTIATION STRATEGIES

& STYLES
SELLING & NEGOTIATION
SKILLS
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NEGOTIATION STRATEGIES
Strategy is the overall approach for conducting the
negotiation.

Tactics are particular actions used to implement a
strategy.
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NEGOTIATION STRATEGIES
Whereas a strategy provides the overall approach used
throughout the negotiation, a tactic is particular action
used at a specific time during the negotiation to serve a
more limited role or purpose.
NEGOTIATION OUTCOMES
THE DUAL CONCERNS MODEL
How much concern does the actor have for
achieving the substantive outcomes at stake in this
negotiation?
(substantive goals)

How much concern does the negotiator have for the
current and future quality of the relationship with
the other party?
(relationship goals)
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Negotiation Styles
A
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U
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Uncooperative Cooperative
Lose/ Lose
(Avoidance)
Win / Lose
(Competitive)
Lose/ Win
(Accommodating)
Win / Win
(Collaborating)
Compromise
Win Lose Style
The win-lose is the most common style of distributive negotiation
wherein a person pursues his or her own wishes at the expense of
other party.

Under this style negotiation is viewed as a game to be won.
Losing may be taken as failure, weakness, and a loss of status.

When engaged in this style, the parties may use different tactics to
win like: persuasion, argument, power, or even threat.

Usefulness
A forceful position during negotiation may be appropriate when the
stakes are high and costs of indecision and compromise are non-
affordable.

It is useful when issues of legality and ethics are at hand.

Where you do not expect to deal with people ever again, and you do
not need their goodwill.

When there is only one prize.

At management level, this style is helpful when unpopular but
necessary decisions must be made.

Win-lose is also a style to use when the other party has a tendency
to take advantage of you.
Avoiding Style
Avoiding the conflict in certain situations need of no negotiation
at all is also a negotiation.

People may physically withdraw by simply leaving the scene of
conflict or they can refuse to get involved by using silence, or
changing the topic of conversation.

Psychologically, avoiders can also deny the existence of conflict.

During formal negotiation, avoiding style is exercised by paying
deaf ear and / or blind eye to the conflicting stimulus.
Usefulness
Useful when:
your involvement will only result in negative outcomes for you;

issue is insignificant;

cost of challenge / cost is quite high;

there is little chance of success;

relationships are more important to be maintained;

to buy time and / or get other party cool down.
Accommodating Style
Accommodating style of negotiation entails giving in to the wishes
of the opponent party.

Like avoidance, accommodating the other party almost in one-
sided way, is also a negotiation.

Unlike avoiders, the accommodators enter into negotiation and
give in a way that strengthens the relationships.

During negotiation, giving in totally / partially may be part of
strategic maneuvering.

Usefulness
When other issues are more important that need satisfying others
and maintaining cooperation.

When social credit is to be built for some latter issue.

To minimize loss when one is already losing.

When relationships are more important than the interests.

Though frequent yielding is not a virtue, a yielding to a fellow in
ire, a balanced yielding among spouses, or even the frequent
yielding obedience of a child to a parent or teacher is a healthy
move.
Compromising Style
Compromising, the most common style of conflict resolution,
entails splitting the differences and reaching an acceptable middle
ground solution through give-and-take whereby each party should
gain something and may have to lose something.

Parties under this style of negotiation, generally use techniques
like trading, bargaining, smoothing over differences, and voting
etc.

Most of the negotiations though start with lose-win style, do end
up at the compromising style.
Usefulness
It is useful:
when two parties have relatively equal power and have
mutually exclusive goals;

when time is not available to solve problems that are complex
and require a great deal of effort to sort out all the issues;

to allow for a temporary solution until more time could be
devoted to unravel and analyze the complexities; and

when competition or collaboration fails to lead to a solution.
Collaborating (Win-Win) Style
Collaborating is based on a willingness to accept other partys
needs while asserting your own needs as well.

It assumes that there is some reasonable chance that a solution can
be found to satisfy both parties in conflict without losing much.

Such solution, most of the time, is not possible but a collaborator
believes that it is worth trying to find that.
Negotiation Strategies
Amar and Hari decided to purchase an office for their newly
started business three months ago. Their first choice was an office
located in a new development, and priced Rs. 500, 000 (about Rs.
25,000 above their limit). Amar thought they could get the price
down through negotiation with the salesman Mr. Shah around their
limit while Hari was less optimistic in that regard.
Negotiation Strategies
Amar and Hari decided to purchase an office for their newly
started business three months ago. Their first choice was an office
located in a new development, and priced Rs. 500, 000 (about Rs.
25,000 above their limit). Amar thought they could get the price
down through negotiation with the salesman Mr. Shah around their
limit while Hari was less optimistic in that regard.
Amar conducted some research on the development and learned that
several of the offices including the one they liked had been on the
market almost a year. Though the house they liked was their first
choice, other offices were also quality offices and could be
accepted as a second choice. Amar met the other salesman, Mr.
Agha and learned that the prices of those offices were also within
their limit. With this homework done, he made an appointment
with Mr. Shah and decided to meet him alone.


Amar informed the
salesman he really liked
the office and might be
sincerely interested at a
lower price such as Rs.
450,000.



LOWBALL
He was going for the
lowest possible price.
Approach
Strategy
VINEGAR-HONEY
Approach Strategy


The salesperson sounded
shocked and said, That is
impossible, we would not
even consider it. Amar
anticipated that response,
and asked, If you would
not accept Rs. 450,000,
what will you ask?
PINPOINT THE NEED

It had been established
that the seller would take
less than the asking price
but not Rs. 450,000. The
task then was to pinpoint
how much less than Rs.
450,000?
Approach Strategy
The salesperson did some
figuring before he said Rs.
490,000. Amar was prepared
for this response who tried
another strategy saying, Mr.
Agha has recently sold two
office of similar stature for
Rs. 470,000, and several
others are available with him.
Why would not you do the
same for me?
A strategy designed to put the
other party on the defensive
in an effort to win some
concessions. Added to the
Pinpoint, the Need strategy
assists in determining what
the seller will actually take.
CHALLENGE
Approach Strategy
The salesperson said,
That house went
cheaper, anyway perhaps I
could trim the price to Rs.
485,000 but you will have
to pay 20% cash down
and the rest within one
week. Amar guessed the
salesman has a room to
tread downward and said,
Approach Strategy
Down payment is not
the problem but I cannot
pay the rest before three
weeks. It is impossible,
said the salesman, our
company rules do not
permit it. Amar replied,
But I cannot pay at least
this much within this
period of time.

FEINTING
This strategy gives the
impression one thing is
desired whereas primary
objective is really
something else.
Approach Strategy
Politicians use a variation
of this strategy to test
receptivity by the public to
something they plan to do.

This planned action is
leaked by a reliable
resource to test
acceptability before
final action is taken.


Approach Strategy

I do not think I could make
further concession, said the
salesman. Ok! Let me consult
my business partner since final
decision will only be after our
mutual consensus, said Amar
and left the salesmans office.
LIMITED AUTHORITY
Limited authority is an
attempt to postpone the
decision on a pretext to get
approval from a competent
authority. Whereas the real
aim is to gain time for
reconsideration, and / or
keeping the opponent under
pressure for a possible
negotiation breakage.
Approach Strategy
Next day, Amar appeared in
the salesmans office again
along with Hari, his business
partner and reiterated his
yesterdays position that they
could not pay Rs. 485,000 at
least within one week. It
seems difficult to give any
further concession without
consulting the builder, said
the salesman.
Approach Strategy
I told you not to approach this
agency, you could never conclude any
deal with them, growled Hari and
stepped out of the office.
You are spoiling an almost
concluded deal. I offer Rs.475,000
though I am not sure my partner will
agree to it. A slight budge from your
position can bring the deal back on
track, murmured Ahmed to the
salesman in confiding style.

Approach Strategy
By the time you bring
your partner back, I call to
the builder for his
opinion. I think it is
possible to reach a deal,
said the salesman while
dialing a telephone
number when Amar
walked out of his office to
trace his estranged
business partner.
GOOD GUY / BAD GUY
The good guy / bad guy
is an internationally
used strategy. One
member of a team takes
a hard line approach
while other member is
friendly and easy to
deal with.
Approach Strategy

When bad guy steps out
for a few minutes, the
good guy offers the deal
that under the
circumstances seems too
good to refuse. Bad guys
usually comprise spouses,
lawyers etc.

Approach Strategy
After few minutes Amar entered
the salesmans office along with
Hari.
The builder has not been around,
but I have availed my own limit
and reduced the price to Rs.
482,000 provided you could give
us your offer in writing today with
the 20% deposit.
Approach Strategy
Amar sensing they were
close to their goal replied,
We really do like this
office, but it is still more
than we want to pay.
Please excuse us while we
discuss ways in which we
might increase our offer.
Would you please
reevaluate your position
too?
DEFER
Deferring strategy
allows the negotiators
time to reevaluate
their positions.
Deferring a decision
to make often proves
that patience pays.
Approach Strategy
Amar and Hari returned in
an hour and offered Rs.
478,000.
The salesperson told them,
I called the builder while
you were away. He gave a
little, but Rs. 478,000 just
wont do.

Approach Strategy
However, if you would be
willing to split the
differences, and make it
Rs. 480,000, we can make
a deal, providing you sign
the paper and put down
your 20% cash today.
SPLIT THE DIFFERENCE
Amar and Hari looked
towards each other and
accepted with pleasure.